Court Approves Consent Decree Resolving Hawaii Hospital Workers’ Suit

The United States District Court for the District of Hawaii approved and entered as its own order and final judgment a Consent Decree in United Public Workers v. Ige, a case involving the contract rights of public hospital workers impacted by legislation authorizing privatization of Maui County’s public healthcare facilities.

After signing into law Hawaii Act 103 (2015), the Governor of Hawaii entered into an agreement to transfer Maui County’s three healthcare facilities to Kaiser, which would terminate the public employment of the hospital workers, effective June 30, 2016. But United Public Workers, which represents about 500 workers at the hospitals, has collective bargaining agreements (CBAs) with the State that are effective through June 30, 2017. The Union filed suit to challenge the timing of the privatization as a violation of the Contract Clause of the U.S. Constitution and moved to enjoin the privatization until expiration of its CBAs. After the district court dismissed the case on the pleadings, the Union sought emergency relief from the Ninth Circuit. The Ninth Circuit ordered expedited merits briefing and set the case for a prompt oral argument. After oral argument, the Ninth Circuit enjoined the privatization transaction pending a decision on the merits. Although the State sought reconsideration, the Ninth Circuit did not vacate its injunction.

The Union and the Governor reached a settlement fully resolving the Union’s claims before the Ninth Circuit issued its ruling on the merits. The Governor agreed to entry of a consent decree providing that, notwithstanding the transfer of the Maui hospitals to Kaiser (which is now scheduled to occur on November 6), the bargaining unit employees will remain public employees covered by the CBAs until the contracts expire, after which Kaiser must offer them at least six months of employment. The Consent Decree ensures that all bargaining unit members will continue to enjoy the full benefits and protections of their CBAs until June 30, 2017, and the additional year of public employment is equally crucial, particularly for those who otherwise would not vest in their pensions or become eligible for higher retirement benefits.

The district court vacated its original judgment and entered the Consent Decree as the final judgment of the Court. At the parties’ joint request, the Ninth Circuit dismissed the appeal as moot. Altshuler Berzon LLP, together with Honolulu-based Takahashi & Covert, represented the Union.